We all make mistakes. Fortunately enough, in the real life they are easy to identify and because of that you can learn not to make them again. On the internet that’s not always the case. When you make a mistake on the internet (while managing an AdWords campaign for example), then you usually don’t even realize it. Therefore you can’t avoid making a similar mistake in the future.

If you want to lower your advertising costs dramatically on AdWords as soon as today, there are only 4 things to be aware of.

(This post describes some useful tactics for managing your AdWords campaign without the Content/Display Network enabled.)

Here are the mistakes I made… please, don’t go in my footsteps.

1. Setting up an initial CPC too low

Unfortunately you can’t be too stingy at the beginning stages of your campaign. Everybody wants to pay as little money as possible for a click, and I’m sure you too want to get to the magic bid of $0.01. But the road that’s gonna take you there does not start with simply setting such a bid on the first day of your campaign. Eventually, it is achievable but it will require some hustle.

My advice: Start with a high bid; i.e. overpay

By overpaying at the beginning you can expect a high position among other advertisers (hopefully #1), which will let you get a better Click Through Rate (CTR).

Why is the game played like that? What is the reason behind automatically getting a better CTR just because your ad is on higher position? It’s pretty simple actually. It’s because ads that are placed higher than the rest are more noticeable which results in more clicks. If you have a really good ad that’s getting a 3% CTR from a #3 position, then you might get even 8% with the same ad if it would have been on position #1.

Good CTR translates to a decent Quality Score, which is of key importance to your advertising costs. So what’s the next step? Once you have a good CTR and a good Quality Score you can start lowering your bids ($0.01 or $0.02 at a time, so it will take a while) until you reach your desired CPC.

What can you name a “good” CTR? If you have 2%, then it’s OK. If you have 3%, then it’s great. If you have over 5%, then congratulations ’cause that’s a big success.

2. Having too many keywords in a single ad group

Google allows you to have hundreds of keywords in a single ad group. Since Google allows it, automatically it sounds like a good idea. Well it’s not…

Such a practice ends with a poor Quality Score for most of the keywords. That’s because you physically can’t create an ad that would be congruent with each and every keyword. (Remember you can only assign an ad to an ad group not to a single keyword.)

My advice: Create ad groups that have only one keyword

“Only one? Isn’t it a slight exaggeration?”

No, it’s not. And it has a lot to do with a way that Google calculates the Quality Score. As I’ve said before ñ if you have many keywords within your ad groups then you can’t create a targeted ad for each and every keyword, and because of that your Quality Score will be lower than it could have been.

The easy way out is to create many ad groups each containing only one keyword. By doing that you will be able to create a targeted ad for each of your keywords. And that’s a short way to getting a great Quality Score.

An example. If you have two ad groups: “weight loss” and “how to lose weight” ñ you can create two separate ads for each of these ad groups. These ads could begin with headlines like: “Weight Loss Made Easy” for the former, and “How to Lose Weight” for the latter. If you were to use only one ad group instead, you would be able to create a targeted ad for only one of the keywords, so the other one would get a worse Quality Score. And poor Quality Score equals expensive clicks.

3. Using broad match

Most people using AdWords don’t even know that such a thing as a match type even exists. And it’s not strange, really, because Google doesn’t put our attention in that direction.

What is a match type? Let me begin by saying that there are 3 match types on AdWords: “broad”, “phrase”, “exact”. The default one is of course “broad”.

I don’t want to go into detail too much so let me just say that a match type is basically a way in which Google will connect the keywords you have chosen to the search phrases that other people are searching with on google.com.

Broad match is exactly what its name says ñ it’s broad. Let me give you an example. Let’s say that your keyword is “plasma tvs”, and you’re trying to sell some plasma TVs. If you are using broad match, your ad will be displayed when someone searches for a term like “alternatives to plasma tvs”. It’s clear that they’re not interested in buying a plasma TV so they won’t click your ad. Instead they will lower your CTR. Consequently, they will lower your Quality Score. (Again, poor Quality Score equals expensive clicks.)

My advice: Use exact match

Exact match is what its name says as well ñ it’s exact. If you’re using exact match your ad will be displayed only when someone is searching exactly for your keyword. Let’s go back to our example. If you’re using a keyword like “plasma tvs”, then for your ad to be displayed, someone will have to search for these two specific words in that order: “plasma tvs”, and nothing more. Your ad won’t be displayed if someone searches for “cheap plasma tvs”, even though they’ve used your keyword as a part of their search phrase.

Using exact match gives you total control over your campaign and lets you get a better Quality Score.

Ok, so how to, actually, set a match type? It’s very simple. The only thing you have to do is to input your keyword in a specific way when setting up your campaign. Here’s how:

Match type Keyword
Broad plasma tvs
Phrase “plasma tvs”
Exact [plasma tvs]

Are there any situations when using a broad match is a good idea? Yes there are but let’s leave it for another time (as well as phrase match).

4. Not having your ads matching the keywords

In AdWords everything need to be in tune with friggin’ everything. Keywords with what people are putting into Google. Ads with keywords. Landing pages with ads. Dogs with cats, and so on.

I won’t be describing all of this but let’s focus on ads themselves for a while. An ad matching a keyword is key to your campaign’s efficiency.

Google reads your ads and checks whether they are matching your keywords or not. If they’re not then Google will think that your ad has low quality… and you don’t want that. That’s why in one of the previous examples I’ve said that you should use a headline like “How to Lose Weight” for the keyword “how to lose weight”.

My advice: Use your keyword in the ad copy

Using such a tactic, you will improve your ads and make Google happy ñ because it sees your keywords in your ads’ copy, and you will make your prospective customers happy as well ñ because they see in your ad the exact same phrase they’ve searched for.

There’s one additional bonus here. If someone searches for the keyword you are targeting (and using in your ad as well), then on the results page they will see that phrase bold in your ad. This will make your ad even more noticeable for them in that specific situation.

“That’s too much stuff…”

Unfortunately, that’s how AdWords works. At first, it seems like a relatively easy thing to use but the deeper you go the harder it gets to produce some decent results.

I’ve made all the mistakes from this list. Why? Well, you don’t know what you don’t know… At some point, I just began to do some testing, and it resulted in big improvements in my campaigns. And that is exactly what I want to give you as my final advice: test everything, collect and analyze results ñ this is the only way to success.

Go ahead and comment. Would you like to know more? Do you know any other common mistakes? Share your knowledge … Yes, I want those cheap clicks and I want ’em now! 😉

About the author: Karol K. is a web 2.0 entrepreneur who shares his thoughts at newInternetOrder.com. Tune in to get his AdWords tips.